SANDERS MORRIS HARRIS GROUP INC.
CHARTER
OF THE
NOMINATING AND CORPORATE
GOVERNANCE COMMITTEE
OF THE
BOARD OF DIRECTORS
I. PURPOSE
The Nominating and Corporate Governance Committee (the
“Committee”) is a standing committee of the Board of Directors (the “Board”) of
Sanders Morris Harris Group Inc., a
The Committee will primarily fulfill its purpose by carrying out the activities enumerated in Section IV of this Charter. The Committee has the authority to retain and terminate, at the Company’s expense, and approve the fees and other retention terms of, director search, legal and other advisors it deems necessary for the fulfillment of its responsibilities.
II.
COMPOSITION
The Committee shall be comprised of at least three directors, each of whom shall be independent directors according to the independence standards established by the Committee consistent with applicable statutes, regulations and NASDAQ listing standards.
Notwithstanding the foregoing, one director who is not independent, as defined by the applicable NASDAQ listing standards, and is not a current officer or employee or a Family Member (which means a person’s spouse, parents, children and siblings, whether by blood, marriage or adoption, or anyone residing in such person’s home) of an officer or employee, may be appointed to the Committee, if the Board, under exceptional and limited circumstances, determines that membership on the Committee by the individual is required by the best interests of the Company and its shareholders, and the Board discloses, in the next annual proxy statement subsequent to such determination, the nature of the relationship and the reasons for that determination. A member appointed under this exception may not serve longer than two years.
The members of the Committee shall be appointed annually by the independent directors of the Board, and shall serve on the Committee for a term coinciding with their Board term. If a Chair of the Committee is not appointed by the Board, the Committee shall itself designate a Chair.
III.
MEETINGS
The Committee will meet at least two times annually, or more frequently as circumstances dictate. The Committee may invite members of management and others it deems appropriate in order to assist it in performing its responsibilities. Meeting agendas will be prepared and provided in advance to Committee members, along with appropriate briefing materials. Minutes will be prepared and the Committee will report its actions and recommendations to the Board.
IV.
DUTIES
AND RESPONSIBILITIES
The Committee has the following specific duties, in addition to any other matters consistent with this Charter, the Company’s bylaws, applicable law and NASDAQ rules, as the Committee or the Board deems necessary.
Nominating
1. Establish and periodically reevaluate criteria for Board membership and selection of new directors including independence standards; and determine as necessary the portfolio of skills, experience, perspective and background required for the effective functioning of the Board considering the Company’s strategy, applicable laws and NASDAQ listing requirements.
2. Search for, recruit, screen, interview and select candidates for new directors as necessary to fill vacancies or the additional needs of the Board, and consider management’s and shareholder’s recommendations for director candidates.
3. Evaluate the qualifications and performance of incumbent directors and determine whether to recommend them for re-election to the independent directors on the Board.
4. Evaluate and recommend to the independent directors on the Board for their approval all nominees for Board membership and the removal of a director where appropriate.
5. Nominate for election and include in the proxy statement for the Company’s annual meeting of shareholders, all nominees for Board membership properly submitted by shareholders of the Company pursuant to the procedures set forth in the Company’s bylaws. Neither the Committee nor the Board shall be required to support the election of nominees submitted by the shareholders.
6. Periodically review, in light of applicable regulations and NASDAQ listing requirements, the procedures in the Company’s bylaws for shareholder nomination of director candidates, and recommend to the Board any changes to such procedures as the Committee deems appropriate.
Corporate Governance
7. Initiate and oversee a periodic evaluation of (a) the quality, sufficiency and currency of information furnished by management to the directors in connection with Board and Committee meetings and other activities of the directors, (b) the Board ’s effectiveness, (c) the composition, organization (including its committee structure, membership and leadership) and practices of the Board, (d) tenure and other policies related to the directors’ service on the Board, and (e) corporate governance matters generally; and recommend action to the Board where appropriate.
8. Develop, periodically review, and recommend to the Board a set of corporate governance principles applicable to the Company.
9. Periodically review the Board’s policies for director compensation and stock ownership, and recommend to the Board compensation programs for directors.
10. Monitor the orientation and training needs of directors and recommend action to the Board, individual directors, and management where appropriate.
11. Periodically review, in light of new legislation and other developments, the Company’s Business Ethics Policy, and recommend to the Board any changes to such Policy as the Committee deems appropriate.
12. Evaluate annually its performance and the adequacy of this Charter, including compliance with applicable law and NASDAQ listing standards, and recommend to the Board any changes to this Charter as the Committee deems appropriate.
[Signature Page Follows]
I, Sandra J. Williams, do hereby certify that I am the duly elected Secretary of the Company and that the above is a true and correct copy of the Charter for the Nominating and Corporate Governance Committee adopted at a meeting of the Board on May 4, 2004, and that this Charter is now in full force and effect.
Sandra J. Williams, Secretary